Enterprise agile practices are becoming more pervasive in product management, portfolio management, and human resources. So, what does this all mean for businesses and for IT?
Traditionally, the notion of agile transformation has been limited to IT or software development departments. Development teams would get trained on a framework such as Scrum and then be expected to adopt the recommended practices to realize the promised productivity and quality improvements.
In fact, many teams have achieved success by applying agile principles. But if these improvements happen only within your software development groups, the organization as a whole won't be optimized and can't get those benefits to the customer.
Organizations are now taking a more holistic agile approach by expanding agile principles and techniques throughout the enterprise and implementing business agility in groups outside of IT. In fact, many organizations will expand agile into three areas outside of software development in 2019, including product development, portfolio management and human resources.
Recently, 394 respondents from 166 companies in 29 countries around the world participated in business agility survey, rating their maturity and sharing their insights, challenges, and successes. Many respondents reported that they are struggling with transforming entrenched culture and processes. Most are developing new funding models and transforming human resources, finance, and other supporting functions.
Despite these challenges, most survey respondents also reported that they are experiencing tangible benefits from their investment in business agility: better ways of working, increased employee and customer satisfaction, and improved market performance.
This maps to my observations and experiences with clients. And organization-wide agility has benefits for more than just the organization and the customer. Those in IT who have already been operating using agile techniques will be able to better collaborate with other groups when the whole company is speaking a common language and using common principles.
Instead of IT groups optimizing their own workflow using agile—only to be slowed down by bureaucratic outdated processes—the entire value stream is optimized when business agility processes are adopted. IT can better understand how its work directly affects the business. Here's how.
1. Agile product management
Although one of agile's principles says that the businesses and developers should communicate daily, communication is often overlooked. Product owners are commonly separated both organizationally and physically, even if they do participate on a Scrum team. A common anti-pattern with new agile teams is the lack of involvement and buy-in from product management groups.
But now, with the business agility movement, product management is getting much more attention, and business people are recognizing the importance of their role in the success of an agile transformation.
There is a growing body of knowledge aimed at determining business value. Agile tools and techniques provide product management with new ways of working with customers, to understand and prioritize the work that will provide them with the most value. Product owners and product managers also recognize the importance of their regular participation and involvement on cross-functional teams to solidify the partnership of IT and the business.
With enterprise business agility, product management recognizes that delivering the highest value earlier to customers results in higher customer satisfaction and allows for a tighter feedback loop. Techniques such as the Google Design Sprint allow product management to prototype and vet ideas earlier with customers.
2. Lean portfolio management
Traditionally, each line of business developed its own annual strategy and used its budget to hire and fund the projects under its purview. Backlogs were often created by converting existing requirements documents into user stories, so that the development teams could "use agile."
By using business agility processes at the portfolio level, you have more visibility and collaboration, which allows your various strategies to align to a common vision. Budgeting by value stream, rather than by project, allows for an organizational structure that will optimize the entire system. Funding and governance using lean and agile principles allow for dynamic budgets aligned to outcomes.
Portfolio management begins with executives agreeing on high-level strategies, objectives, outcomes, and key results that help their organizations measure and meet their strategic goals. The work is broken down into features and, ultimately, user stories that align with the high-level strategy.
Quarterly planning, alignment, transparency, collaboration, and measurement of outcomes aligned with the strategy are practices that may be new for an organization. The culture also must be one that sets the strategy and empowers the staff to make more decisions about how to implement. The organization must become more lean in its processes, eliminating such things as lengthy approval chains or other bottlenecks.
3. Human resources
Though any organization will benefit from switching to an agile mindset and practices, HR especially will thrive in an agile culture. Hiring practices, roles, career paths, culture, performance management, and training are all areas that may need to be updated to align with agile values and principles.
Agile principles promote a culture in which there is safety in taking risks and innovating. Lean and agile leadership classes teach leaders to practice servant leadership techniques in which they support and empower rather than assign or control the work of those who report to them.
Unless the entire organization understands the leaders' expectations, there can be confusion and frustration as people try to work out the expectations of their roles.
Without a cultural and mindset shift that is practiced by leaders at the highest level, true agile transformation will have a hard time succeeding.
Implement business agility
A full agile transformation requires a shift in thinking for an entire enterprise. Agility is not simply a matter of following guidelines in a framework or learning a new set of vocabulary terms for project management. It is a change in mindset that affects the way every person in the organization works.
IT will undoubtedly be relieved that the agile mindset is being expanded throughout the enterprise, as it will no longer be caught in the middle of having to practice both old and new processes.
At the heart of an agile culture is the willingness to continue to learn and adapt for improvement. The culture and mindset embrace such things as collaboration, transparency, critical thinking, teamwork, learning, and growth.
Understand your customers, deliver value quickly, get feedback, and repeat the cycle. These are all concepts that can be used in IT, product management, portfolio management, HR, or really any domain.
When an IT organization uses agile practices, it improves. When an entire enterprise operates with an agile mindset, it soars.
Businesses cannot afford to look only at IT when considering agility, said Eric Adames, enterprise agility coach and president of agile training firm SendoAgil.
"The boundaries are moving and everyone has to answer the same questions: What are the outcomes we're shooting for, and how is our work contributing toward achieving those outcomes?"
—Eric Adames
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